Jun 2026

Weekly round -up for Stonex Bullion

By Rhona O'Connell, Head of Market Analysis

Warsh sworn in, European Central Bank likely to hike this month, gold and silver still meandering in thin conditions

The Royal Tudor Beasts; Royal Dragon 2026

StoneX Bullion GmbH

The precious metals markets remain hamstrung, with persistently narrow ranges and sentiment appears to be souring. Gold ETFs are dribbling out metal; the latest numbers from the World Gold Council are for 22nd May with holdings at 4,131t, a 106t gain on the year so far, but a nine tonne drop on the week. Small mixed changes since then, on the basis of the Bloomberg numbers, which are less exhaustive. Silver funds benefited from some lively buying in mid-May that helped to take silver through $80 and towards $90, but that level again provided resistance and the funds have again gone into reverse. Basis the Bloomberg numbers the funds have shed 2,160t or 8% year-to-date to stand at 24,661t.

Gold, between three key moving averages

Source; Bloomberg, StoneX

Silver; as usual, wider ranges than gold, but still tight

Gold moved higher as the end of last week on renewed hopes for a settlement in the Gulf although the latest comments from President Trump that the fresh Iran proposals are “totally unacceptable” has, not surprisingly generated A small correction.

Source: University of Michigan

Meanwhile on COMEX the mood in the week to 26th May, when gold was directionless just above $4,500, saw a small increase in outright longs (386.5t from 382.2t) and a small amount of short covering (91.3t to 83.5t). Silver was the other way round with longs dropping from 2,885t to 2,680t while shorts expanded from 992t to 1,029t. Prices were steady between $73 and $78.

Outlook

This remains contingent on developments in the Middle East and although some progress has been made, the key issues remain unresolved. meaning that prices are likely to remain rangebound, potentially with a downward bias on the back of interest rate expectations.

Gold COMEX positioning, Money Managers (t)

Silver;similarly constrained

We continue to note that extended periods of very narrow range trading do tend to lead to a buildup of pressure and generate a breakout in one direction or the other. This time gold is clinging tenaciously to $4,500; it has found support from the 200-day moving average, is clashing with the ten-day, and is facing nearby resistance from the 20-day and 50-day at $4,581 and $4,620 respectively.

As noted last time, since the markets are so quiet it is possible that we will see an outbreak of pent-up demand when the background environment looks more settled, but by the same token it is likely also to see some regional selling into any fresh price strength. The fact that the moving averages have been able to repel upward attacks and that inflationary fears turn into negative movements on the back of rising bond yields still leads us to think that the bull case for gold, while tangible, is not wholly convincing.

Meanwhile the primary driver is again the state of the Middle East. It does look as if some progress has been made, but every time there is a reversal gold tends to retreat on the expectation of tighter monetary policy in an effort to contain inflationary forces. The European Central Bank is expected to hike rates this month even though near-term inflation expectations in the EU dropped to 2.9% in April – but longer-term expectations are unchanged at 4% for the next twelve months.

ECB President Christine Lagarde’s speech to the meeting of Francophone Central Bank Governors last week focused on the need for central banks to be able to preserve independence in the face of supply shocks that drive inflation and activity in opposite conditions, and in the face of narrowing monetary conditions stemming from fiscal pressures from defence needs, the digital transition and ageing. She pointed to the independence of the Federal Reserve, saying that “The matter is not settled, but we can clearly see the mechanism at play: where credibility exists, defending independence does not fall on the central bank’s shoulders alone. Instead, it is upheld by all those who have witnessed its value”. No doubt the new Fed Chair Kevin Warsh will have taken all of this on board, bearing in mind that Mme Lagarde was one of the first to jump to the defence of Chair Powell when he was under pressure from political influences and the Fed’s independence was looking to be under threat.

Gold and the 2Y, 10Y yields